Different Start-Up Business Structures I - Which One should I Choose?
In Startup Business Structures of admin (December 29, 2008 3:46 pm)
When you put up your own business, there are a lot of things to consider. It includes the basic structure of your company. One of them is a sole proprietorship.
Option 1: Sole Proprietorship
This is the simplest business structure. It is also the commonest structure utilized by small businesses. When you are the solitary proprietor of the business, it means that you have all the power to do what you deem is necessary for the business. You also get to keep all the earnings made.
Just because sole proprietorship looks uncomplicated does not mean it comes easy. As the sole owner, the earnings your business make are charged as personal income. Your business also needs to pay higher taxes and you must shoulder all the legal responsibilities of your venture. In spite of everything, sole proprietorship is still probably the best structure for any small scale business.
Option 2: Partnership
When two or more persons are contributing to the business, the organizational structure is called a partnership. Each one has a say on the funding the business, marketing strategy, and many others that deal with running the business. Each one too shares the legal responsibilities, individually as sole proprietors.
Whenever a new person becomes a business partner, he or she is obligated to sign a legal agreement which may include partnership arrangements, grounds for the need to give up the partnership, sharing of the business’ assets, and the responsibilities that he or she should take on. Such arrangements should be made before a person becomes part of the venture.
Click here to learn about the other options
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